Virus or hacked?

My other half just sent me this through msn live:

http://SweeetOfferz.com

Only thing was she wasn't using it at the time, has the account been hacked or has the system contracted a virus?

was she signed in at the time? if not, possibly hacked, if she was signed in, most likely a virus.

change the msn password and download a freeware anti-malware program, such as sunbelt vipre, in the meantime.

This is becoming quite common. Install, update and run Malwarebytes' Antimalware in Safe mode and fix anything that it finds. Please post the log file here if anything is found.

Daughter's machine was doing a similar thing.... or so I thought.

I ended up tracking it down a site that "http://www.photodropperz.com" that she had "logged in" to with her MSN ID as a "friend" sent her a link to a photo.

The site no longer exists but there are load of other domain names that pop up and some are quite convincing. In the Ts&Cs on the site it blatently says that by supplying your username / password authorises them to send messages on your behalf. Scumbags.
They were sending out further harvesting sites and porn - not great as she's just 11 years old!

I got her to change her password and within about 20 mins she got a "recovery password" email than she didn't request. These emails from MSN continued for about 2-3 weeks (several a day).

So I'm guessing you've had a virus that's either grabbed the details and is not sending out messages on her behalf , or you've signed into one of these sites witout realising it.